Research On Perfecting The Tax System Of CFC In China Under The Background Of Digital Economy

In the context of economic globalization,controlled foreign companies(CFCs)have emerged due to the existence of international tax competition and tax havens.Controlled foreign companies are foreign companies that are established in tax havens or low tax zones and controlled directly or indirectly by their residents.Multinational corporations keep profits in the tax havens where controlled foreign companies are located,so as to achieve the purpose of paying less taxes or delaying tax payment in their home countries.This kind of tax avoidance has seriously infringed on the tax benefits of taxation entities in various countries.All countries have issued controlled foreign company rules(CFC rules)to combat CFC international tax avoidance.However,today's CFCs still exist,and due to the rise of the digital economy,various new business models emerge in an endless stream,making business activities more covert and rapid on a global scale.This makes multinational corporations using CFCs a more viable opportunity to avoid taxation and aggravate national Government international anti-tax avoidance difficulty.In September 2013,the OECD launched the BEPS project and released all 15 specific BEPS action plans in October 2015.The first of these,"Responding to Tax Challenges Brought by the Digital Economy" and the third,"Strengthening CFC Regulations," are proposals for coping with and improving the current digital economy and the existing CFC rules.China,as a member of the G20,also responded positively.On June 8,2017,the Chinese government signed the "Multilateral Convention on the Implementation of Tax Treaty Related Measures to Prevent Tax Base Erosion and Profit Transfer(BEPS)"(hereinafter referred to as the "Convention")in Paris,France.This time,67 countries and regions including China became the first signatories to the Convention,that expressed our determination to participate in the international tax reform of BEPS.The content of this article is divided into five parts.The first chapter mainly introduces the research background,research significance,domestic and foreign research status,research contents and research methods of controlled foreign companies.The second chapter introduces the relevant concepts and theories of the digital economy and the CFC rules,in particular,the characteristics of the digital economy and the six elements of the CFC rules are introduced in detail.The third chapter analyzes the current situation,existing problems and the impact and challenges of the digital economy in China's controlled foreign companies.In Chapter 4,the first step of the BEPS Action Plan is addressed to address the taxation challenges posed by the digital economy.And the third report on the “Enhanced CFC Rules” lists and analyzes the main contents of the CFC taxation system in typical countries in the world,and draws lessons from other countries' response plans.Chapter 5,combines the recommendations of the BEPS Action Plan issued by OCED and other countries.The CFC rule,in conjunction with China's existing CFC tax system and related regulations and regulations,gives the tactics and improvement plans for China's CFC taxation system in response to taxation challenges brought about by the digital economy.